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With help from Jennifer Haberkorn, Paige Winfield Cunningham and Brett Norman

MICHELLE OBAMA STEPS INTO OBAMACARE FRAY — First lady Michelle Obama joined the sales pitch for Obamacare on Wednesday, stepping into the Oval Office to meet with mothers who support the health law. She’s been on the sidelines, for the most part, avoiding the political confrontations that could turn her into a more divisive figure. But adding her wattage to the White House’s marketing campaign could be a boon for the effort. POLITICO’s Jennifer Epstein reports: “‘The first lady is the best salesperson’ for the White House, senior adviser Valerie Jarrett told POLITICO. She’s getting involved now, Jarrett said, because she’s the right person to convey the message of the moment: that the uninsured — especially young people and minorities — should look for insurance on exchanges and that those with insurance are already feeling the benefits of the law.” http://politi.co/1bR3omn

--TODAY, IN WHITE HOUSE ACA MESSAGING: STATE-BY-STATE BENEFITS – The administration plans to release an updated report of state-specific Obamacare benefits, according to a White House official. It’s an effort to highlight benefits even in places where the law remains deeply unpopular — and what residents there stand to lose if the law were to be repealed.

MASSACHUSETTS STRUGGLING TO ADAPT TO OBAMACARE — Massachusetts built a health exchange before it was the thing to do — creating a template for President Barack Obama’s effort. But a funny thing happened on the way to ACA implementation: the Bay State enrollment system broke. Efforts to upgrade to an ACA-compliant system have been marred by technical glitches. And the story features a familiar villain, if you listen to state officials: CGI. The contractor at the heart of HealthCare.gov is being blamed by Massachusetts exchange officials for botching the state’s effort. The company says it’s engaged in an “enormous team effort” to protect and enhance people’s coverage. http://politi.co/1kY4n6s

--Jon Gruber, a member of the Massachusetts exchange board and a White House adviser during development of Obamacare, tells PULSE that the problems plaguing the Massachusetts exchange could lead to “some disruption” but that it would be minimized by the state’s triage efforts. “I don't think this is a leadership problem so much as just bad luck with unreliable contractors,” he said.

Good morning, and welcome to Thursday PULSE on this 170th anniversary of the publishing of “A Christmas Carol.” We’re expecting a few GOP puns about the “ghost of Obamacare future” between now and next week.

“Oh please, say to me, you'll let me be your PULSE.”

SOURCES: BAUCUS IN LINE TO BE NEXT AMBASSADOR TO CHINA — After a term dominated by Obamacare, Sen. Max Baucus’s is ready to get away — as far away as possible, it seems. The Montana Democrat, who’s been in the Senate since 1978 and chairs the Senate Finance Committee, is expected to be named the next U.S. ambassador to China, sources tell POLITICO. His decision not to run for reelection startled the beltway crowd earlier this year, and it came amid mounting apprehension about the looming rollout of Obamacare. http://politi.co/1cBhwh4

--WHO WILL TAKE BAUCUS’S SPOT? – If and when Baucus is confirmed, the retiring Sen. Jay Rockefeller would be next in line for the Finance chairmanship. But the coy Rockefeller hinted to our colleagues that he's happy in his current chairmanship. “I love Commerce,” said Rockefeller, who chairs the Commerce, Science and Transportation Committee. “We just finished a fantastic hearing. I love Commerce.” If Rockefeller didn't want the post, Sen. Ron Wyden (D-Ore.) would be next in line. He's expected to have the job in 2015, when Baucus and Rockefeller have retired from the Senate.

BUDGET DEAL FEATURES SHORT-TERM DOC FIX — A two-year budget agreement that includes a short-term Medicare “doc fix” has passed the Senate 64-36. The three-month fix averts a 21 percent cut in Medicare payments that would have kicked in Jan. 1 under the Sustainable Growth Rate formula. The $7.3 billion cost of the measure will be paid for through adjusted reductions in Medicaid payments to hospitals with many uninsured patients, lower payments to long-term-care hospitals and an extension of the Medicare sequester for FY 2023. Lawmakers hope to permanently repeal and replace the SGR before this patch expires. The House passed the budget agreement last week. President Barack Obama has said he will sign it.

STATE EXCHANGES HEARTENED BY ENROLLMENT SURGE — State exchange directors cheered a surge in enrollment Wednesday, telling reporters that their call centers have called for reinforcements to handle the volume. Pro’s Natalie Villacorta reports: “During a media teleconference organized by Families USA, the leaders of exchanges in California, Connecticut, Kentucky, New York and Washington all reported big boosts in sign-up numbers. Covered California Executive Director Peter Lee said enrollment had more than doubled — with 15,000 people picking plans on both Monday and Tuesday of last week, compared with 7,000 a day in early December. The directors said they expect the momentum to last through the end of the open enrollment period in March.” http://politico.pro/1ephGip

COMMONWEALTH: OBAMACARE NOT TO BLAME FOR PREMIUM HIKES – At least pre-2014 premium hikes, that is. While many unpleasant health care realities are blamed on the Affordable Care Act, premium hikes over 10 percent that took effect from July 2012 to June 2013 have little to nothing to do with Obamacare. That’s according to a Commonwealth Fund study out this morning that reviewed the justifications for double digit hikes and found that nearly all blamed the increases on medical costs and some on administrative expenses. About half attributed some increase to ACA-related costs, including no-copay contraception and preventive services for women, those costs accounted for just 1 percent of the hike. Of course this is all before the major market reforms kick in next year. Read more here: http://bit.ly/1dntI6R

** At Philips, our mission is to create a company that makes a difference to you. We believe the way to achieve this is through innovation — making cities safer and people healthier. Others may focus on what innovation does; we focus on what it does for you. http://www.usa.philips.com/ **

A CLOSER LOOK AT OBAMACARE SUBSIDY THREDHOLD — The American Action Forum is out with a primer on what could happen to Obamacare premium subsidies if they exceed an economic threshold established in the health law. The law requires that if premium subsidies exceed 0.504 percent of GDP, enrollees will be required to pick up a larger share of the tab. “As a result, subsidized exchange enrollees at all income levels will see their benchmark premium contribution, the portion of their premium they are required to pay, increase at least 25 percent by 2019,” AAF concludes. http://bit.ly/1jj0yNt

REPORT: HEALTH LAW WILL SURVIVE WEAK ENROLLMENT IN YEAR ONE — The flawed rollout of Obamacare may “dampen” the overall enrollment in the first year of new coverage programs, but the problems caused by inadequate sign-ups won’t be fatal to the law, according to a new report released Wednesday by the Robert Wood Johnson Foundation. “Provisions in the law that offset the effects of adverse selection in the first three years of implementation, financial subsidies structured as caps on the share of income devoted to premiums, and competitive pressures in insurance markets would blunt the implications in 2015 and beyond of this difficult start,” according to the report, authored by two Urban Institute fellows. The report: http://bit.ly/1cbRm9M

CMS ISSUES BASIC HEALTH PLAN METHODOLOGY — The agency has proposed a funding methodology for Basic Health, an optional state coverage program for people earning between 133 percent and 200 percent of the federal poverty level and for some lawfully present immigrants. CMS is also asking state-run exchanges to send premium information on their second-lowest-cost silver plans to help determine funding for Basic Health. The optional program, which has drawn interest from a few states, is still scheduled to launch in January 2015. http://bit.ly/1jj0yNt

HHS I.G. OFFICIAL JOINS DENTONS — Dentons, an international law firm, has hired Catherine Hess, senior counsel to the HHS inspector general, as a partner in its health care practice. According to the announcement, Hess will focus on “government and internal investigations and Medicare and Medicaid compliance matters on behalf of health systems, hospitals, manufacturers and other health care organizations.”

WHAT WE’RE READING, by Jennifer Haberkorn

Americans without health insurance disapprove of the health law at about the same rate as the insured, according to a New York Times/CBS News poll. Fifty-three percent of the uninsured disapprove, compared with 51 percent of those with health insurance. http://nyti.ms/1kWXmmb

New Jersey Gov. Chris Christie mocks an Obamacare ad to encourage people to volunteer, according to NJ.com. http://bit.ly/1kWWIFi

Virginia Gov.-elect Terry McAuliffe has reappointed Bob McDonnell's health secretary, a move that is expected to help his push for Medicaid expansion. http://wapo.st/1folVY9

Before Chairman Max Baucus was announced as the administration's pick for ambassador to China, he told the NYT that he believes major legislation "has to be bipartisan" to be sustainable. “I mean, one party can’t jam legislation down the other party’s throat. It leaves a bitter taste," he said. http://nyti.ms/19zv2ot

USA Today also reports that states with well-running exchanges are reporting enrollment bumps of 30 to 40 percent from last week to this week. http://usat.ly/1do2dKl

** At Philips, our mission is to create a company that makes a difference to you. We believe the way to achieve this is through innovation — making cities safer and people healthier. Others may focus on what innovation does; we focus on what it does for you. http://www.usa.philips.com/ **